DeFi Locked Assets Come Close to $3 Billion

UTC by Teuta Franjkovic · 3 min read
DeFi Locked Assets Come Close to $3 Billion
Photo: Depositphotos

DeFi is currently growing by nearly half a billion per week in used or ‘locked’ assets, with it coming close to $2 billion just two weeks ago while now it is ready to surpass $3 billion.

Governance tokens, which give holders the right to affect the direction of decentralized finance projects, had been among the biggest hits in the Ethereum ecosystem last year. DeFi, short for decentralized finance is the notion that crypto entrepreneurs can recreate traditional financial instruments in a decentralized architecture, outside of companies’ and governments’ control.

Bitcoin and Ethereum were the original DeFi applications. Both are controlled by large networks of computers and not states’ governments. Many traders use Bitcoin like gold, as a store-of-value investment that protects against inflation, while Ethereum has been instrumental, and somewhat controversial, in enabling startups crowdfund their operations.

Be it as it may, DeFi is currently growing by close to half a billion a week in used or ‘locked’ assets, with it coming close to $2 billion just two weeks ago and now close to surpassing $3 billion.

These data represent only the tracked assets in a stats site Defipulse wherein its rankings Compound and Maker have been fighting it out with the third and fifth position currently being in the race as well.

Aave and Synthetix Fighting for Third Place among DeFi Assets

Open-source protocols Aave and Synthetix are in a tie for third place and both are holding close to half a billion dollars.

Just for a reminder, just a month ago, the whole DeFi space had less than half a billion in locked assets. However, but since then the return of the token business model has maybe brought back some FOMO.

Crypto stablecoin lending aggregator Curve and Balancer are on the rise, nearing a combined half a billion fresh out of the box. The rest aren’t moving a lot, possibly due to not acting as real tokens. Uniswap, a fully decentralized protocol has frozen contract for example. However, it is still not clear why the crypto platform dYdX ain’t moving from the dead spot at all.

All of these Dapps, however, at least the most important ones, fulfill each other because in more than just one way they bank on each other for some of their services.

Just, for example, you can’t have Curve without having many smart contract-based exchanges where you can do the let’s say, the market making.

Also, you can’t have Uniswap or Balancer without all these tokens to be swapped. However, if you manage to get all of the tokens in one place, you easily can gather half a billion a week – at least this was the case this month.

At the time of writing the combined market cap of Ethereum’s top 8 DeFi governance token projects had inclined to more than $4.3 billion. Just for comparison, Bitcoin’s market cap currently stands at $169 billion, Ether’s is at $26 billion, XRP  is at $6 billion, and Bitcoin cash’s is at $4 billion.

This suggests these governance tokens are becoming amazingly popular in the crypto-space because they are giving users a direct stake in managing DeFi platforms. Still, it is a fact that many people trading in the crypto space still don’t fully realize what these tokens are and what they do.

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